Do Subsidy Policy and Transparency Impact Firm Value in the New Energy Industry? Evidence from Data Envelopment Analysis-Based Measurement of Corporate Subsidy Performance

Abstract

The new energy industry has long benefited from government subsidies in China. However, the effectiveness of subsidies as a policy tool to guide sustainable development and competition has been widely debated. This paper examines the impact of subsidy policies on the firm value of new energy companies from 2011 to 2018. Initially, we employed data envelopment analysis (DEA) to calculate corporate subsidy performance (CSP). Additionally, we investigated the impact of disclosure transparency on the relationship between government subsidies and firm value. We confirmed the significant negative impacts of subsidies and disclosure on firm value through robustness tests and sensitivity analysis. Furthermore, when considering ownership issues, we found negative impacts on firm value for state-owned firms. In contrast, privately-held firms demonstrated a positive influence on firm value. This study highlights the policy implications of subsidy effectiveness, accurate information disclosure, and corporate social responsibility on the sustainable development of subsidies in the new energy industry.